Market Flux Event
Bank of Japan Set to Signal Underlying Inflation Has Reached 2% Target
Read this in the Market Flux appThe Bank of Japan is preparing to signal at its October meeting that underlying inflation has roughly reached its 2% target, according to sources cited by Reuters. The move would mark a significant milestone for the central bank, which has pursued that goal for years through historically accommodative monetary policy.
Governor Kazuo Ueda reinforced that outlook in public remarks, saying Japan's economy is recovering moderately despite some weaknesses, that business sentiment is favorable, and that the price trend is approaching 2%. He stressed that anchoring underlying inflation around the 2% level is important, signaling the bank views the milestone as durable rather than transitory.
Ueda confirmed that financial conditions remain accommodative and supportive of economic activity even following the September rate hike, and said the BOJ will continue raising rates in response to developments in the economy and inflation. The comments suggest the central bank is on a gradual tightening path, with the October meeting now poised to formally acknowledge that the inflation goal is within reach.
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Sources
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